Australia’s Future Fund Leads Investor Group Buying Stake in Telstra InfraCo Towers

Posted on 06/30/2021

Australia’s Future Fund (as the largest investor) is leading a group of investors to buy a 49% ownership stake in InfraCo Towers from Telstra Ltd. InfraCo Towers represents the largest network of mobile tower sites in Australia. Other investors in the buying group are Sunsuper and the Commonwealth Superannuation Corporation (CSC). Morrison & Co will managed the asset.

Telstra InfraCo Towers owns and operates approximately 8,200 tower assets including over 5,500 mobile towers supporting critical digital infrastructure throughout Australia. The transaction values the business at A$ 5.9 billion and the transaction expected to complete in Q3 2021. Telstra will retain a 51% holding in the business and has entered into long-term service agreements with InfraCo Towers to secure continued access to services that will support their presence in mobile and data services. Telstra expects net cash proceeds after transaction costs of A$ 2.8 billion at completion and the Towers entity will have no debt. Telstra has entered into a 15 year agreement (with the option to extend) with InfraCo Towers to secure ongoing access to existing and new towers. Telstra’s 5G technology now covers almost two-thirds of the Australian population.

The Future Fund is a large investor in Australian infrastructure. The sovereign wealth fund is keen on getting exposure to digital infrastructure and the long-term thematic of data growth.

Telstra invests in 26 GHz spectrum auction
On April 23, 2021,Telstra announced it had secured 1000 MHz in the 26 GHz spectrum auction, investing A$277 million to further extend its leadership in 5G now and into the future. Telstra secured the spectrum in all major capital cities and regional areas where it was sold. Telstra CEO Andrew Penn said the new mmWave spectrum would dramatically increase capacity and speeds for Telstra customers. Telstra intends to pay for the spectrum in five equal annual instalments.

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